Financials prop up Asian markets for third day in succession
The major markets across the Asia-Pacific region advanced for the third day in succession on Tuesday led by financial stocks after Standard Chartered Bank plc., the second largest bank in the UK, joined the list of major banks reporting positive performance in the first two months of 2009. Expectations of stimulus from the BOJ, as well as indications of rate cuts by RBA as early as April, lifted sentiment across the markets overshadowing the weaker closing in the U.S market on Monday.
Crude oil traded modestly lower in Asian trading. Oil prices, which declined sharply following OPEC's decision not to change the output levels, rebounded on Monday on expectations that economic recovery might happen earlier than expected and closed at $47.35 after trading in a broad range of $43.62 to $47.63.
Commodity prices, measured by a group of six metals in the London Metals Exchange, gained 3% on Monday with April futures price in New York for copper surging up 5%. Resource related stocks advanced following higher prices. The relief rally in the global markets seems to be losing steam after the markets discounted positive comments by officials of major banks such as Citigroup, JP Morgan, Bank of America and Barclays Bank that they expect positive results for the first quarter of 2009. Comments by Standard Chartered Bank, the second biggest bank in the UK, that it had a strong start to 2009, helped the banks rally for the fifth consecutive day.
The benchmark Nikkei 225 Index advanced 244.98 points or 3.18% to close at 7,949, while the broader Topix Index of all First Section issues gained 19.83 points to close at 762.
Japan's service sector output was up a seasonally adjusted 0.4% on month in January, the Ministry of Economy, Trade and Industry said on Tuesday, posting an index score of 106.4. The data came in sharply higher than analyst expectations for a 0.5% monthly decline following the revised 1.6% decline on month in December and the 1.1% fall in November.
Financial stocks advanced on expectations that the BOJ might announce new initiatives for stabilizing the banking sector and provide stimulus to the economy. Sumitomo Mitsui Financial soared 7.28% and Mitsubishi UFJ Financial advanced 6.35%. Mizuho Financial and Resona Holdings advanced 5.29% and 3.71% respectively.
Sumco Corp., the second largest manufacturer of silicon wafers in the world surged up more than 9% after brokerage firms, Nomura Holdings and KBC Securities, upgraded the stock to "buy" rating. Chipmakers Elpida Memory and Shin-Etsu Chemical also advanced.
Exporters posted gains helped by a weaker yen. Sony Corp advanced 4.13%, Canon gained 2.89% and Sharp ended up by 2.11%.
Automakers advanced after the Nikkei business daily reported that Toyota plans to slash the price of its current generation Prius hybrid car to 1.89 million yen from 2.33 million yen to match rival Honda's Insight. Toyota also plans to bring to market in 2011 a new hybrid that is more affordable than the Prius. Both Toyota Motor and Hondo Motor gained more than 3% each.
Hitachi said on Monday that it will spin off its money-losing automotive devices operations and digital consumer business and focus on heavy electric machinery, railway and social-infrastructure businesses in a bid to turn around its battered operations. The company also appointed the head of its plant technology firm as president of the parent company. The stock ended higher by 1.90%.
Oil-related stocks ended higher following the overnight gain in crude oil price. Nippon Oil advanced 4.47%, Inpex gained 2.80%, and Showa Shell rose 1.79%.
In Australia, the benchmark S&P/ASX200 Index advanced 103.50 points or 3.09% to close at 3,452, while the broader All Ordinaries Index gained 92 points, or 2.78% to close at 3,389. The minutes of the recently concluded RBA meeting, in which the central bank paused, raised hopes that the RBA will cut interest rates as early as April to help the economy combat recession, which helped lift market sentiment despite lingering doubts about the global economic outlook. Economic data indicating a rise in lending by banks to corporate houses and households also generated some buying interest.
Commonwealth Bank of Australia advanced 4.84%; National Australia Bank rose 3.38%, Westpac Banking Group gained 3.08% and ANZ Bank added 2.42% during the day. Investment bank Macquarie Group soared 8.78%.
In the resources sector, index leader BHP Billiton rose 2.84% and Rio Tinto gained 2.36%. Gold
Among energy stocks, Santos advanced 3.09% and Woodside Petroleum added 1.86%, while Oil Search remained unchanged from previous close.
Airline stocks also advanced with Virgin Blue Holdings, which reported an increase in domestic and international traffic for January, advancing 7.07%, and Quantas Airways gaining more than 6%.
Retail stocks ended higher on positive sentiment across the markets. Wesfarmers advanced 3.77%, David Jones rose 2.02% and Woolworths gained 2.63%.
In Seoul, the benchmark KOSPI Index surged up more than 3.4% or 38.42 points to close 1,164, led by financials and foreign buying in select blue-chip stocks. The local currency continued to strengthen against the U.S green back, closing higher by 31.50 won at 1408.50.
Financials led the rally; Shinhan Financial surged up more than 9.5% and KB Financial, the holding firm of Kookmin bank, advanced 6.77%. Woori Finance ended higher by 7.26%.
Among the blue-chip stocks, Samsung Electronics added 2.1% and LG Electronics gained 2.94%.
Exporters advanced on the strengthening of the local currency. Among the automakers, Kia Motors soared 6.67% and Hyundai Motor advanced 2.64%. Ssangyong Motor gained 3.08%.
Shipbuilding stocks also gained with Hyundai Heavy Industries and Samsung Heavy Industries adding 5.28% and 5.30% respectively.
The stock market in Hong Kong ended lower on Tuesday, giving away most of the gains made intra-day, on profit booking and concerns about the global economic outlook. The benchmark Hang Seng Index, which gained 450 points or 3.6% on Monday, closed at 12, 878, down 99 points or 0.76%.
Telecom stocks declined sharply; Hutchison Whimpoa is down 4.44% and China Mobile lost 3.59%.
Insurance stocks Ping An and China Life shed 4.73% and 4.94% respectively. China-related stocks also declined on profit taking. China Overseas declined 6.82%, while China Resources lost 2.21%.%. In the resource space, Aluminum Company of China decreased 3.42%, Petrochina lost 2.18% and CNOOC shed 0.56%.
Mixed trend was witnessed among utilities; While HK & China Gas declined 2.38%, HK Electric gained 2.60 Financial stocks also closed mixed. While HSBC Holdings gained 2.88%, Bank Comm advanced 0.59% and Hang Seng Bank added 0.64%, BOC Hong Kong declined 3.30%.
Among the other markets in the region, China's Shanghai Composite Index gained 3.02% or 65.04 points to 2,218 and Taiwan's Weighted Index advanced 1.41% or 70 points to 5,041. Indonesia's Jakarta Composite Index declined 0.96% or 12.76 points to 1,312 and Singapore's Strait Times Index declined 27.61 points to close at 1,559. |